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Secretary of Labor Thomas E. Perez
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DOL Annual Report, Fiscal Year 2003
Outcome Goal PR

Improve Procurement Management

Accountability to American citizens begins with responsible stewardship of expenditures and the Department is committed to cost-effective employment of its resources. One means of accomplishing this is to improve the overall efficiency of the delivery of services, and a major influence in this effort is the Competitive Sourcing Initiative of the President's Management Agenda (PMA). The aim of this government wide PMA component is to improve management of procurement processes by opening to competition specified functions that can be performed commercially in order to determine if they can best be performed by the public or private sector. Regardless of the outcome of the competition, the ultimate winner is the public, which benefits from higher quality services at more reasonable costs.

The DOL goal is to compete between the public and private sector work involving up to 50 percent of the commercial positions on the Department's FY 2000 Federal Activities Inventory Reform (FAIR) Act inventory. DOL's initial efforts in FY 2002 succeeded in meeting our goal of directly contracting five percent of these eligible positions to the private sector. During FY 2003, the Department expanded the number and types of positions classified as commercial in nature and potentially subject to public-private competition. DOL will develop a plan for accomplishing its goals within the guidelines of revised OMB Circular A-76.

As mentioned in the Departmental Management Introduction, DOL's performance in this area as indicated by the PMA Scorecard is lagging behind the other four government wide initiatives. Internal measures tell a similar story: DOL met one of its two procurement performance goals in FY 2003. A more detailed discussion of Performance Goals PR1and PR2 follows.

Enhance the Efficiency of DOL's Ser vices

Performance Goal PR1 (Office of the Assistant Secretary for Administration and Management) FY 2003

Complete public-private or direct conversion competitions on not less than the 10 percent of the FTE listed on DOL's 2000 Federal Activities Inventory Reform (FAIR) Act Inventory.


Percentage of commercial competitive or commercial exempt FTE on the Department's 2002 FAIR Act inventory included in completed competitions or direct conversions.

Percentage of Direct Conversions.

Percentage of Completed A-76 Competitions.


The goal was not achieved. DOL's 2000 FAIR Act inventory identified 2,802 commercial FTE. The FY 2003 target was conversion or competition of 10 percent, or 280 of these FTE. DOL directly converted the equivalent of 168 full time employees (FTE), which included the 12 FTE carryovers from FY 2002. The 168 FTE account for six percent of the FAIR Act inventory. DOL completed no A-76 competitions in FY 2003. (OMB Circular A-76 establishes Federal policy for performance of recurring activities.)

Program Description

Competitive sourcing is one of five key initiatives of the President's Management Agenda. Under competitive sourcing, executive agencies identify activities that are available in the commercial marketplace but currently are performed by Federal employees. Federal and commercial providers then compete to determine the most cost-efficient means of service delivery.

Analysis of Results

Although DOL did not achieve this goal, DOL has made progress in its competitive sourcing initiative. The mid-fiscal-year revision of Circular A-76, including the elimination of direct conversions and the establishment of new procedures for competition, was a factor in DOL's failure to meet its FY 2003 goal.


DOL established a Competitive Sourcing Office effective October 1, 2003. Critical strategies to improve competitive sourcing performance include:

  1. Continued leadership of the DOL-wide A-76/FAIR Act Work Group, which coordinates the achievement of DOL's competitive sourcing goals.
  2. Identification of FTE for streamlined and standard competitions.
  3. Ensuring that DOL employees receive appropriate training on Circular A-76 and the competition process.
  4. Ensuring that competitions are conducted in accordance with labor management relations obligations and applicable personnel regulations.
  5. Continuing to evaluate the methodology used in FAIR Act Inventory development, to ensure accurate classification of functions.
  6. Participation in the Federal Acquisition Council A-76 Interagency Work Group.
  7. Coordination with DOL's workforce planning and restructuring activities, to ensure consistency with competitive sourcing goals.
  8. Implementation of formal competitive sourcing procedures and policies in a Program Management Guide.
  9. Development of a computer system to track implementation of DOL's competitive sourcing plans and the costs/savings resulting from competitions.

Management Issues

Ensuring that competitions are conducted in accordance with applicable obligations between labor and management and existing personnel regulations could present a challenge. However, this challenge is controllable if statutory provisions are properly followed and DOL management utilizes effective practices, such as working closely with unions and human resources staff. DOL has assigned human resource specialists to assist competitive sourcing staff in this effort.

Goal Assessment and Future Plans

To improve program efficiency, DOL has committed to meeting or exceeding its FY 2004 competitive sourcing goal by completing streamlined competitions or standard competitions on not less than 15 percent of the commercial FTE listed on DOL's 2000 FAIR Act Inventory. DOL will also ensure that senior agency management is enlisted in promoting and supporting DOL's competitive sourcing initiative. DOL plans to achieve this goal by overseeing agencies' development of their competition plans, which identify commercial functions for competition; planning appropriate training for DOL staff; identifying and implementing best practices for both streamlined and standard competitions; and ensuring competitions are conducted in accordance with applicable personnel regulations and statutory provisions.

Future plans for achieving DOL's competitive sourcing goal, include:

Formal competitive sourcing procedures and policies. Currently in its final stages of development, DOL's Program Management Guide sets forth the competitive sourcing procedures and allocates roles and responsibilities. This guide also provides effective competitive sourcing communications strategies and identifies required training curricula for DOL employees involved in the competitive sourcing process.

A computer system to track DOL's implementation of its competitive sourcing plans and the costs and savings realized as a result of competitions. DOL has engaged consultants to provide support in a variety of areas related to competitive sourcing, including recommendations regarding development of an effective tracking database.

To ensure that competitions are completed within the given timeframes, DOL will:

  • Establish specific, detailed competition schedules.
  • Monitor competition progress to ensure timely completion.
  • Ensure that DOL staff and managers are trained on the procedures of the newly revised OMB Circular A-76.
  • Designate individuals within DOL agencies who are responsible for competition progress.
  • Make technical assistance available to managers and teams involved in competitions and other competitive sourcing-related activities.

Ensure Performance Results Are Achieved Through Contracts

Performance Goal PR2 (Office of the Assistant Secretary for Administration and Management) FY 2003

Award contracts over $25,000 using Performance-Based Service Contracting (PBSC) techniques for not less than 30 percent of total eligible service contracting dollars.


Dollar Value of Performance-Based Contracts awarded.


The goal was achieved. At the end of the 3rd quarter of FY 2003, DOL had used performance-based service contracting techniques for 42 percent of total eligible service contracting dollars. Obligations of performance-based contracts totaled $788 million.

Program Description

In March 2001, the Administration established the performance-based service-contract-in goal for Federal agencies, which is based on the goals established under the Government-Wide Acquisition Performance Measurement Program, developed by the Procurement Executives Council. DOL's goal is derived from the Administration's goal. Performance-based contracting methods provide objective, measurable performance requirements and quality standards in every aspect of contracting - from bids to payment. The emphasis is to pay for the results of a contract rather than the effort put forth by the contractor.

Analysis of Results

Based on data through the end of the 3rd quarter of FY 2003, DOL awarded 42 percent of total eligible service contracting dollars for contracts over $25,000 using performance-based service contracting (PBSC) techniques.


DOL will continue to facilitate high-level support for the performance-based service contracting initiative, and will offer additional training sessions to contracting and program management personnel throughout the Department. DOL will continue to encourage and monitor the effectiveness of PBSC training provided to relevant staff from the various DOL agencies. The strategies used by DOL were successful in this area, as DOL exceeded the FY 2003 goal by 12 percent as of the third quarter.

Management Issues

The data source for this goal is the Federal Procurement Data System (FPDS). The performance data are reliable, as the information is collected manually from the contract specialist and/or the contracting officer at the time the procurement action is completed. A procurement analyst in the Department's procurement policy office validates the data before it is transmitted to the Federal Procurement Data Center.

The largest acquisition program at the Department of Labor is the Employment and Training Administration's Job Corps Program. Approximately 70 percent of the Department's acquisition dollars support Job Corps contracts. These acquisitions are for the operation and maintenance of more than 110 Job Corps Centers around the Country, and their related outreach and employment assistance services. Job Corps Center contracts were converted to PBSC by modifying the fee structure to incorporate incentives and penalties for the contractor based on achievement of measurable goals including, but not limited to, the number of students entering employment and student retention in the program. By the end of FY 2005, DOL anticipates converting a majority of the Job Corps contracts to PBSC as the existing contracts expire.

Goals Assessment and Future Plans

The Administration has not yet determined the FY 2004 PBSC goal. The Department is evaluating whether to amend the format of the Annual Acquisition Plan to capture additional data to more effectively identify and forecast prospective performance-based service contract awards. This could allow more effective monitoring of the program. Emphasis will continue to be placed on converting and awarding eligible service contracts over $25,000 using PBSC techniques. The dollar value of PBSC contracts will continue to be monitored on a quarterly basis to ensure attainment of the PBSC goal.

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